The industry-wide digital cinema roll-out moved a step closer with Sony's announcement that it had signed a VPF agreement with Digital Cinema Implementation Partners (DCIP), the consortium formed by AMC, Cinemark and Regal to manage their transition to digital. That leaves only Warner Bros. among the major studios to be without a VPF agreement for the second phase of the digital cinema conversion.

"We're in the middle of negotiations," Warners domestic distribution president Dan Fellman said. "We're close. So we might be the last one, but we're going to get there."

Sony signed its VPF pact with Digital Cinema Implementation Partners several weeks ago, but the news was delayed pending internal review of the formal announcement.

Through VPFs, studios volunteer to pay the equivalent of print costs for years after switching to digital distribution as a means of defraying most exhibitor costs to convert auditoriums. Sony refers to its VPF as a "digital conversion fee."

For Warners, set to release more films this year than any other distributor, the cost of a VPF is likely to run considerably higher than that for studios with lower annual output. Sony also is among the most prolific film distributors.

Of course, the roll-out will depend on the unlocking of the credit markets as the DCIP 14,000-screen deal alone will cost in the billion dollar range. Then comes the Cinema Buying Group's (CBG) approximately 7,000 screens - a more complex deal despite the smaller size owing to the number of companies, the diversity of markets, and types of theaters involved.

I would be deeply remiss if I didn't bring your attention to this post on the digital cinema self-financing panel at ShoWest.

Sperling Reich must have the fastest typing fingers in the West to nail down as much detail as he does here from a fast-paced lunch-time discussion.

When Macdowell turned to Solomon to get an exhibitor's opinion the discussion turned somewhat acrimonious, in a friendly sort of way. "I happen not to be a proponent of 2K [projector resolution] and I have not been a big proponent of integrators," said Solomon. "I believe we should be able to band together and form our own consortium and go negotiate for our own VPFs. I don't believe in giving a cut to an integrator."

CBG's Campbell, like Christiansen, isn't as down on integrators as Solomon and is of the opinion such third parties might be necessary, especially in the short-term. "Self financing is not going to happen for a long time," said Campbell. "I think self-financing is going to be done through the integrators and if we have to pay a small fee of the VPF then so be it."

Solomon, whose smooth New Orleans drawl had Macdowell comparing him to a slick southern lawyer, is not the retiring type and is almost always quotable. Given the chance to air a few thoughts, he let his grievances fly. His comments received the biggest audience reaction by far. "If 2K is the way we're going, then 35mm is better," he argued. "Apparently digital helps distribution, but it doesn't do a thing for exhibition. If distributors want to go with 2K then give us the money and we'll get on with it, otherwise we're going to have to go at our own pace. If distribution wants 2K, give us the money!"

Solomon went on to get a huge laugh when he recounted asking one of his regional managers, "What's the difference between a 35mm film print and a digital cinema hard drive? He said, 'about 40 pounds'."

Levin attempted to diffuse Solomon by pointing out that two of the studios were present and on stage, ready to talk about giving Southern VPFs, but Solomon got the last word in during this exchange as well by snapping back "I know, but I have to figure out how I'm going to pay for [3D] glasses with one of them."

In one instant Solomon made public the rumor that Fox had been telling North American exhibitors that after "Ice Age 3" the studio would no longer be paying for disposable 3D glasses. Presently none of the studios pay for disposable glasses in Europe, though they have been footing the bill in the U.S., Canada and at times Mexico.

 Read the whole thing. It will be well worth your time.